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Budget Woes Lead to Army Cost-Cutting Steps

Stars and Stripes|23 Jan 2013|by Matt Millham

KAISERSLAUTERN, Germany -- In anticipation of stinging budget cuts, Army leaders have directed a host of cost-cutting measures that will roll back support for community and recreational activities, freeze civilian hiring and halt restoration and modernization projects.

In a recent memo, Army Chief of Staff Gen. Raymond T. Odierno and Secretary John M. McHugh outlined more than a dozen “near-term” and “reversible” cuts they said will “avoid even more serious future fiscal shortfalls.” Deputy Defense Secretary Ashton B. Carter directed all the services to draw up similar plans to mitigate the risks of severe budget cuts that will kick in should Congress and the president not reach a deal to avoid across-the-board spending cuts known as sequestration.

While Odierno and McHugh said they were hopeful any deal would leave the Army’s budget largely intact, “we must begin to slow spending now and plan for the worst,” they wrote.

The memo offers few specifics, but indicates detailed instructions are on the way. Meanwhile, U.S. Army Europe is going over the document to figure out what it means for the command.

“We’re in receipt of it and we’re looking at what the ramifications are and what it will mean to us and how we will implement it,” Mark Ray, a command spokesman, said Tuesday.

The plan signed by Odierno and McHugh starts with an immediate, Army-wide freeze on civilian hiring and calls for a 30 percent reduction in base operations spending -- including community and recreational activities -- and the curtailing of non-mission-critical training.

Some temporary employees may also be let go under the plan, and employees on term appointments won’t be extended “unless a specific exception is approved,” according to the memo.

The plan also directs commanders to review contracts and studies for possible curtailment or cancellation and to limit spending on ceremonies, administrative supplies, furniture and computer equipment.

Odierno and McHugh also direct commanders to cease facility sustainment activities “not directly connected to matters of life, health or safety,” and to stop restoration and modernization projects.

Exceptions for nearly all those cuts can be granted on a case-by-case basis, according to the memo, and Army leaders will protect funding related to wartime operations and programs for wounded troops. An Army official told Stars and Stripes the service will also try to maintain military family programs “to the maximum extent possible.”

In addition to the cuts, the memo also calls for new procedures for approving production contracts and research, development, test and evaluation contracts in excess of $500 million. Guidance to curb shipping costs and forgo some maintenance is also written into the plan.

“The near-term steps listed above will only achieve a small portion of the savings required should sequestration and a yearlong continuing resolution occur,” they wrote, referring to automatic spending cuts and a resolution that limits defense spending at fiscal 2012 levels.

If Congress and the president don’t hash out a budget deal by March 1, sequestration would slash about $492 billion from the defense budget over 10 years, according to the Defense Department. And if the continuing resolution now funding the department at fiscal 2012 levels is extended beyond March 27, “funds will run short at current rates of expenditure,” Carter wrote.